The Reserve Bank of India (RBI) recently released a report assessing the progress the country has made moving from cash to digital payments.
According to the study, the country has seen a “steep shift” toward digital payments over the past five years.
The news has been seasoned with articles over the last two years analyzing the pros and cons of demonetization. With the recent news from Mastercard, however, the favor seems to fall on the pro side of fence – at least for the growth of electronic payments – with payment facilitators playing a major role.
Paytm has reached an estimated valuation of $10 billion due to the recent liquidation of $47.2 million in employee stock, making it the second most valuable startup in India after Flipkart. And this comes in addition to the company’s current initiative to support 10 million Indian merchants in QR-based payments over the next three to six months.
A year after the Indian government’s dramatic demonetization move, which temporarily removed a significant amount of cash from the country’s economy, its citizens are taking stock of the results.
Much of the conversation surrounding the release of the Reserve Bank of India’s annual report last week focused on the return of demonetized currency to the system – a confirmation, in the eyes of critics, that the policy of demonetization did not work as intended.
India removed all limits on cash withdrawals this week, ending its demonetization period. The government had imposed strict limits on cash withdrawal amounts after its initial announcement last November.
While digital transactions rose sharply after demonetization, data from the Reserve Bank of India shows cash making a return.
The payments news from India just keeps coming.
As the government continues its push toward a cashless society, its policies are getting mixed reviews. But companies continue to shore up their digital payment offerings, hoping to capitalize on the climate there.
In the U.S., regulators, businesspeople and other groups are in the midst of a debate about how financial technology firms should be regulated. The OCC’s proposed special purpose national bank charter for fintech companies is one example; a white paper outlining policy objectives around the fintech sector issued by the Obama administration at the end of its term is another.
But the U.S. is hardly the only place where the deliberation over just how to oversee this rising sector is taking place. Financial technology is on the minds of governments worldwide, which signals real opportunity for payment facilitators.
